SURESHKUMAR LAKHOTIA vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 5 PUNE

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WP/7640/2023HC BombayHCBM01027336202318 July 2023Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA2 pages
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What did the High Court hold?

The High Court quashed and set aside the notice of attachment dated June 13, 2023, issued to HDFC Bank, and the impugned order dated May 31, 2023, passed by the ACIT. The Court directed the Commissioner of Income Tax (Appeals) to consider and dispose of the petitioner's stay application and the appeal within a period of 16 weeks from the date of the order. Until then, no coercive steps were to be taken against the petitioner. The Court explicitly clarified that no observations were made on the merits of the matter. The ratio decidendi is that in cases where appeals and stay applications are pending, and the revenue consents to a direction for expeditious disposal, the High Court can intervene to set aside coercive measures and direct timely adjudication.

What were the facts?

The petitioner, Sureshkumar Lakhotia, is challenging a notice dated June 13, 2023, issued by the Assistant Commissioner of Income Tax (ACIT), Circle 5, Pune, under Section 226(3) of the Income Tax Act, 1961. This notice directed HDFC Bank to pay amounts from the petitioner's accounts to the ACIT. This action was in furtherance of an order dated May 31, 2023, by which the ACIT rejected the petitioner's application for a stay. The petitioner had filed an appeal and a stay application before the Commissioner of Income Tax (Appeals) on October 19, 2022, and June 8, 2023, respectively, which were still pending.

What were the issues?

1. Whether the notice of attachment dated June 13, 2023, issued under Section 226(3) of the Income Tax Act, 1961, and the order dated May 31, 2023, rejecting the stay application, are liable to be quashed and set aside? (Question of law and fact). Assessee's Contention: The petitioner argued that the order of attachment and the rejection of the stay application should be quashed. The petitioner also prayed for a direction to the Commissioner of Income Tax (Appeals) to hear the stay application and the appeal expeditiously. The petitioner relied on the grounds of merits for their prayer. Revenue's Contention: The revenue, through Mr. Suresh Kumar, stated that the order could be passed as prayed by the petitioner.

Which sections of the Income-tax Act were involved?

Section 226(3)

AI-generated summary — verify with the full judgment below

1/2 904-wp-7640-23.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.7640 OF 2023 Sureshkumar Lakhotia ….Petitioner

V/s. Assistant Commissioner of Income Tax Circle 5, Pune & Ors. …Respondents ---- Mr. Rahul Sarda a/w Ms Revati S. Nansi i/b PDS Legal for Petitioner. Mr. Suresh Kumar for Respondents. ----

CORAM : K.R. SHRIRAM & FIRDOSH P. POONIWALLA, JJ

DATED : 18th JULY 2023

P.C. : 1 Petitioner is aggrieved by a notice dated 13th June 2023 that was issued by respondent no.1 to respondent no.4, i.e., HDFC Bank, under Section 226(3) of the Income Tax Act, 1961 (the Act), calling upon respondent no.4 to pay over the amounts mentioned in the accounts of petitioner to respondent no.1. This is in furtherance to an order dated 31st May 2023, which has also been impugned in this petition, by which respondent no.1 rejected petitioner’s application for stay. 2 Petitioner has preferred an appeal before respondent no.2 along with stay application. Appeal and the stay application was filed on or about 19th October 2022 and 8th June 2023 respectively, which are still pending. 3 Mr. Sarda has enough grounds on merits and, therefore, prays that the order of attachment issued under Section 226(3) of the Act, dated 13th June Meera Jadhav MEERA MAHESH JADHAV Digitally signed by MEERA MAHESH JADHAV Date: 2023.07.19 16:58:34 +0530

2/2 904-wp-7640-23.doc 2023 and the impugned order dated 31st May 2023 passed by respondent no.1 be quashed and set aside and respondent no.2 be directed to hear petitioner’s application for stay as well as the appeal expeditiously. 4 Mr. Suresh Kumar on instructions states that the order be so passed. 5 Therefore, we hereby quash and set aside the notice of attachment dated 13th June 2023 addressed by respondent no.1 to respondent no.4 and the impugned order dated 31st May 2023 passed by respondent no.1. We direct respondent no.2 to consider and dispose petitioner’s stay application as well as the appeal within a period of 16 weeks from today. Until then, no coercive steps to be taken. 5 Petition disposed. 6 We clarify that we have not made any observation on the merits of the matter.

(FIRDOSH P. POONIWALLA, J.) (K.R. SHRIRAM, J.) Meera Jadhav

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